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The question is about question 6 from BPP F7 revision kit 2012 (the task is to prepare SOFP, P/L and changes in equity; list of account balances is provided
“The new property had replaced existing one that was sold on the same date for $95. It had cost $50 and had a carrying value of $80 at the date of sale”.
The point is that they treat the difference between carrying value and cost as revaluation surplus. Neither clear indications that the revaluation took place, nor the “Revaluation surplus” item in account balances was provided.
My question is: how should I come to conclusion that it was revaluation and not an overhaul or other increase in carrying value (for example, the additional value provided for dismantling, removing and restoring the site)?
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